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Experts say Britain’s new Prime Minister Liz Truss is missing an opportunity to ease the U.K.’s energy crisis

September 7, 2022, 8:18 AM UTC
New U.K Prime Minister Liz Truss must tackle Britain's raging energy crisis.
Carl Court—Getty Images

Of the many challenges facing the new U.K. Prime Minister Liz Truss, who officially replaced Boris Johnson on Tuesday, the country’s soaring energy crisis is by far the most pressing.

With winter looming and the war in Ukraine ongoing, the U.K. energy regulator Ofgem warned in August that British households’ energy bills will surge 80% in October when a government mandated cap on energy prices expires. Under Ofgem’s proposed ceiling increase, the average household energy bill would leap from £1,971 to £3,549 ($4,100) a year.

“Without intervention, U.K. households will suffer the largest real terms decline in disposable incomes since records began,” climate and energy think tank E3G said in a recent proposal outlining policy measures Truss could take to alleviate the energy crisis. “The pain will be most acute for those on lower incomes, but even those on middle incomes face declines of between 5% and 8%. One in three households could find themselves in fuel poverty this winter.”

Truss, who served as the U.K.’s environment secretary in 2015, supposedly has a plan. The BBC reports the new PM will announce a freeze on energy price increases on Thursday, keeping the cap at £1,971 by subsidizing energy providers through a loan scheme that will cost the government an estimated £130 billion ($150 billion) over 18 months. Bloomberg reports a separate scheme to support small businesses, which do not benefit from the same price cap, will cost the government a further £40 billion.

But, in the long term, consumers will still foot the bill, as energy providers will repay the loans through (relatively) higher energy prices further down the line. Higher prices will disproportionately hit lower-income households, potentially extending high costs of living over decades. Improving energy efficiency—by insulating homes, for example—is a far better long-term solution.

“Investment in energy efficiency lowers households bills permanently, bringing down inflation, reducing the risk of recession, and putting money back into the economy because people aren’t spending more on their energy bills,” says Colm Britchfield, a policy advisor at E3G and one of the authors of the group’s proposal.

E3G is one of numerous energy policy advisors recommending Truss’s government invest in insulating homes and other tools to boost energy efficiency. Building out renewables is another favored suggestion. But Truss has shown no signs of adopting those policy proposals.

During her tenure as environment secretary, Truss slashed subsidies for solar power farms, calling them a “blight on the landscape.” During her campaign for PM, Truss promised to review a ban on fracking. The Times reports Truss will increase licenses for new oil and gas exploration projects, and Truss has pledged to scrap the so-called “green levy” on consumer energy bills, which helps fund government schemes to insulate homes. 

“We need to see the detail on what suspending green levies mean,” Britchfield says, noting that the government might opt to take on the cost of the “green levies” itself but that actually scrapping the funding altogether would be “a real disaster.”

The government cut a similar insulation scheme in 2013, Britchfield says, resulting in roughly 9 million homes missing out on efficiency upgrades that could have shaved £300 off of their annual energy bills. Now, with the U.K. legally bound to achieve net zero carbon emissions by 2050, insulating homes should be a vital policy—but Truss has kept mum on the topic.

“The most effective way to lower costs without lowering quality of life is to get more out of the energy we buy and the case for investment in energy efficiency has never been stronger,” Britchfield says. “The challenge is now convincing politicians like Liz Truss that this is actually a worthwhile investment.”

Eamon Barrett


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6 seconds

The U.K. opened the world's largest offshore wind farm, Hornsea 2, last week, installing 165 turbines, each measuring 200 meters tall, 55 miles off the coast of Yorkshire. The new wind farm stole the title of world’s largest from its neighbor, Hornsea 1, and can generate enough electricity to fulfill the needs of a city with 550,000 people. According to Patrick Harnett, program director at Hornsea 2, a single rotation of the 81-meter long blades of each turbine takes just six seconds and generates enough energy to power a single home for a day.

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